Archive The Faber Report

  Monday, 15 Oct 2018 | 9:40 AM ET

Faber Report: Icahn challenges Dell deal

CNBC's David Faber reports on Carl Icahn uping his stake in the technology company in an attempt to block the company's plan to return to the public market without an IPO. »Read more
  Friday, 5 Oct 2018 | 10:42 AM ET

Michael Dell and Silver Lake in showdown with shareholders over VMware plan

Posted ByDavid Faber
Michael Dell, CEO of Dell Inc., attends the annual Allen & Company Sun Valley Conference on July 8, 2016.
Drew Angerer | Getty Images
Michael Dell, CEO of Dell Inc., attends the annual Allen & Company Sun Valley Conference on July 8, 2016.

A showdown is looming between Dell Technologies and the shareholders who own the tracking stock for its 81 percent stake in VMware.

Amid widespread opposition to the plan for buying that tracking stock, Dell's owners, Michael Dell and Silver Lake Partners, are considering other alternatives, including raising the price they are offering or dropping the plan altogether.

On July 2 , Dell Technologies proposed buying the VMware tracking stock, which trades under the symbol DVMT, for $109 a share in cash and stock. The transaction would in one sweep take Dell public and allow Michael Dell and Silver Lake to pocket a large portion of the $13 billion difference between the value of VMware tracking stock and VMware stock itself. The deal would deliver 21 percent ownership of Dell Technologies to holders of DVMT at a valuation of $79.77 a share along with cash.

The morning of the announcement, Michael Dell explained to CNBC why it was the chosen path.

But in the three months since the deal was announced, opposition to its terms, which require a majority of DVMT holders to approve, has been consistent.

The company is in the midst of a road show, without Michael Dell, to drum up support for the plan. But hedge funds and other investors who have spoken to CNBC indicate the company will not have enough support to get the deal through.

While the hedge fund Elliott Management has chosen not to be the public face of a fight against Dell, it is opposed to the current plan, as are almost all the hedge funds that hold the stock.

P. Schoenfeld Asset Management, which owns $150 million of DVMT shares, detailed its case in a recent letter for why the deal needs to be changed.

Schoenfeld argued for a 20 percent increase in the consideration in the form of either an improved equity ratio, more cash or other alternatives such as a contingent value right. And the firm said it does not believe that Dell's recent examination of doing an IPO of Dell, which could then be followed by a buy in of DVMT, would benefit Dell.

Given the lofty valuations for an initial public offering that Dell recently received from investment banks, Dell may be more inclined to consider the IPO route. After taking place, it would allow Dell to buy in the tracking stock with stock at a 20 percent premium to its trading price.

According to people with knowledge of the estimates, the banks bidding for Dell came in with valuations ranging from a low of $90 to as high as $135. Whether it was using a sum of the parts, a price to levered free cash flow consolidated EPS or a multiple to EBITDA all for 2019, the numbers pitched by the banks were well above the $79.77 value of the current deal.

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  Friday, 5 Oct 2018 | 9:40 AM ET

Widespread shareholder opposition for Dell deal

CNBC's David Faber reports the latest on the deal between Dell Technologies and VMware. »Read more
  Thursday, 27 Sep 2018 | 9:41 AM ET

Athenahealth fields multiple bids, but offers not much higher than current stock price, sources say

Posted ByDavid Faber

Athenahealth has received multiple takeover bids, sources tell CNBC.

The bids are not seen as being far above the stock price of $131 before the latest news, but the Athenahealth board is motivated to get a deal done, the sources said. Interest is coming from two private equity firms and one strategic buyer, the sources said.

Paul Singer's Elliott Management previously had bid $160 a share for the health-care software maker in an all-cash unsolicited offer. That put pressure on the company to consider strategic options. Jonathan Bush stepped down as CEO in June.

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  Thursday, 27 Sep 2018 | 9:40 AM ET

Faber Report: Athenahealth receives multiple bids, strategic and financial, according to sources

CNBC's David Faber reports on Athenahealth receiving multiple bids. Bids are appearing not far above the current stock price. »Read more
  Tuesday, 25 Sep 2018 | 9:05 AM ET

Qualcomm accuses Apple of stealing chip secrets and giving them to Intel

Posted ByDavid Faber

Qualcomm has unveiled explosive charges against Apple, accusing it of stealing "vast swaths" of confidential information and trade secrets for the purpose of improving the performance of chips provided by rival Intel, according to a court filing.

Qualcomm hopes the court will amend allegations in its existing lawsuit against Apple accusing it of breaching the so called master software agreement that Apple signed when it became a customer of Qualcomm's earlier this decade.

The two companies have been embroiled in direct and indirect litigation around the globe centered on Apple's unwillingness to have its suppliers pay Qualcomm royalties it deems excessive for the iPhone.

The filing, made overnight in Superior Court in San Diego, is the latest salvo in that fight, designed to put pressure on Apple to settle. But Qualcomm's general counsel, Donald Rosenberg, told CNBC the case stands on its own and would have been filed regardless of the on-going dispute.

"Unlawful use of Qualcomm's valuable trade secrets to try to help a competitor catch up irreparably harms us and must not be allowed to continue," he said.

The new charges are part of a separate lawsuit filed in November alleging that Apple was in violation of the agreement it signed with Qualcomm when it began work to use Qualcomm's chips in the iPhone. That agreement required Apple to allow Qualcomm to periodically insure that the source code software and tools it was sharing with Apple as part of the agreement were being appropriately protected.

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  Thursday, 6 Sep 2018 | 9:02 AM ET

CBS board offering CEO Moonves $100 million in stock as exit package: Sources

Posted ByDavid Faber

The CBS board is deep in settlement talks with CEO Les Moonves that would result in his departure and the appointment of COO Joe Ianniello as his interim replacement, people close to the negotiations told CNBC.

The talks have been going on for some time but have yet to reach a conclusion given continued back-and-forth about his exit package, the sources said.

While under his contract he is due as much as $180 million in severance and a production deal, the board is offering a roughly $100 million exit package made up almost entirely of CBS stock, sources said. They said the board also wants the right to claw back some of the compensation if it's determined that sexual harassment allegations against Moonves are confirmed.

As was widely reported Wednesday, CBS and its controlling shareholder, Sumner and Shari Redstone's National Amusements, are negotiating a settlement to end their litigation about whether the CBS board has the right to vastly dilute the voting power of NAI. While it is possible the settlement with Moonves and between CBS and NAI could be announced simultaneously, sources said they are not linked.

CBS officials declined comment. The company's share price opened slightly higher Thursday after the CNBC report.

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  Tuesday, 24 Jul 2018 | 9:39 AM ET

Qualcomm-NXP deal deadline looms but still no clear sign of approval

CNBC's David Faber reports a failure to approve a deal between NXP and Qualcomm would send a chill through the tech sector. »Read more
  Monday, 16 Jul 2018 | 9:42 AM ET

Comcast highly unlikely to counter for Fox assets

CNBC's David Faber reports sources are indicating it is highly unlikely Comcast will make a counteroffer for Twenty-First Century Fox but will remain focused on Sky. »Read more
  Tuesday, 3 Jul 2018 | 9:40 AM ET

Faber Report: Who will buy Fox's regional sports networks?

CNBC's David Faber reports the latest on the bidding war over Fox's assets, with special focus on the company's regional sports networks. »Read more